Business intelligence, often abbreviated as BI, is a term that refers a range of software applications and analyses used to gain information from a corporation or business’s raw data.
As a field, BI consists of a number of related processes and activities, including online analytical processing, data mining, querying, and reporting.
Companies use BI to make cost-effective decisions, identify new opportunities for growth, and eliminate unnecessary spending. BI is much more than mere reporting—it’s the information that drives business decisions. Chief information officers use BI applications, metrics, and analyses to target, alter, and/or eliminate any unnecessary or inefficient processes.
Today’s set of BI tools are incredibly accessible and useful for every size of business—from small to large. Employees are team members are more likely than ever to be included in the process of identifying trends based on data, and making decisions based on those trends. There are, however, technical and cultural challenges associated with BI tools. Management and executive staff need to ensure that the data that feeds into applications is consistent and reliable—in short, a good basis for decision making.
Why Use BI?
There are many advantages to using BI in your business, company, or organizations. And indeed, BI tools and systems are not simple for large corporations, contrary to popular belief. Small businesses can also benefit from BI. Some of the most common advantages to consider include:
- BI allows users to integrate data from a number of sources and applications, including Excel or MS Access files, as well as real-time data from applications.
- BI offers transparency and visibility to employees at every level. Information about a company’s activities, decisions, and performance is no longer restricted to upper-level management or executives. Now, entire teams can understand their impact, based on data analysis. This makes it easier for everyone to get on board with certain goals.
- BI can help to integrate information from various domains of a company’s activities, such as marketing, finances, and sales.
- These tools for businesses provide a fast and efficient way to access relevant information. BI software is synced with real-time information.
- For companies that are experiencing rapid growth, BI tools give them a way to assess what’s going on without allotting too many resources.
- Launching a product, service, or application is made easier with BI tools, and key performance indicators (KPIs) can be tracked.
Data mining is a BI tool which involves analyzing data sets. For businesses, it involves identifying trends and patterns based on computational analyses. The goal of data mining is to use a particular data set to extract a set of patterns. Businesses then use that information to make decisions.
Online analytics are another common type of BI tool, and may also be referred to as web analytics. The goal of these analytical processes is to assess and optimize the effectiveness of a business’ web presence. Today, websites play a large role in marketing, and web analytics assess metrics such as page views, pay-per-clicks, and interactions to help a company understand how its marketing efforts are being received by online audiences.